Why no effort to tackle the banks?
CHIEF Justice Raymond Zondo handed part one of his report, which contains his explicit remarks on the banks’ conduct, to President Cyril Ramaphosa in January, followed by part two on February 1, the third volume on March 1, and the fourth was delivered on April 29. The fifth, expected to be the final volume, is due next month.
However, there seems to be a lack of appetite to implement Zondo’s recommendations that two of South Africa’s major banks should be investigated for participating in dubious business dealings linked to the Gupta family and state capture.
Nedbank and Standard Bank have been implicated in the State Capture Commission report, as having corruptly benefited from their business dealing with Gupta-linked Regiments Capital. This corrupt dealing cost stateowned SAA, Airports Company SA (Acsa), and Transnet billions of rand through money laundering and fraud.
The lack of interest or action in implementing Zondo’s recommendations to investigate these banks, seems to be in line with the widespread speculation that the country’s banks are allowed unprecedented freedom to do as they wish in the country. They level unaffordable interest rates against certain people, decisions and metrics apparently based on race, and unbank companies and individuals whom they deem, at their sole discretion, to be a “reputational risk”, and despite evidence to the contrary, turning a blind eye from anything that does not suit them.
Some legal and political experts have expressed concern about the way banks act and conduct business, without being held accountable. The Zondo commission report found more than R35 million had been invoiced by Regiments Capital to Nedbank for interest swap deals between Nedbank Capital and Acsa, and then Nedbank recovered the money from Acsa over the life of the interest swap transaction.
The report said Nedbank’s arrangement with Regiments Capital was contrary to its principal interests “by increasing the margin payable by Acsa to Nedbank and, thus, increasing its 50% share of this margin”.
It also made remarks about Standard Bank concerning a transaction of more than R22m that was invoiced by Regiments Capital to Standard Bank in relation to a R1.75 billion interest swap, between Standard Bank and Acsa, and then recovered by Standard Bank from Acsa over the life of the interest swap transaction.
“The Acsa interest swap contracts with Nedbank and Standard Bank were procured through the corrupt involvement of Regiments Capital,” read the report.
Those who have distanced themselves from holding the two banks accountable include the Ombudsman for Banking Services and the Office of the Presidency.
Zondo recommended in his report that the banks should be further investigated because the commission ran out of time before completing its own investigation, including hearing their side of the story. But this has not happened as the Office of the Presidency, which commissioned the Zondo commission and was handed the report, said it was not its role to investigate the banks.